US Brokers brokering Canadian domestic freight

[NTravels]

I am seeing a very big surge of US brokerages bidding on domestic Canadian freight, and I am of course, under the impression this is illegal since they are most likely not registered with CRA, don't have a GST#, and probably do not file any GST/HST.

Is there something I am missing, and this is potentially legal?

Only angle I could see this being legal is the brokerage is taking their cut off the top from the client, and then telling the Canadian carrier to collect their pay directly from the client (including the GST portion owed on the freight charges).

Anyways, been wondering about this for a bit now, and thought I might drop a thread to see if anyone has anything to add that I'm not thinking of.

 

[Ins-Broker]

Also seen some of those brokers not pay the carriers.

 

[SCAM CHASER]

My understanding is that it is not illegal for a US broker to arrange transportation on domestic Canadian traffic. What they are ignorant about is registering with the CRA re collection of GST. Because of tax treaties between the US and Canada, they would report that business income only on their US tax filings, and of course, their payments to Canadian carriers would be zero-rated.
Similarly, a Canadian broker with no offices in the US can broker loads intra-US; however, if their customer was in the States, they would want a W-9 or W-8BEN-E completed.

 

[frtbrkr]

My understanding is that it is not illegal for a US broker to arrange transportation on domestic Canadian traffic. What they are ignorant about is registering with the CRA re collection of GST. Because of tax treaties between the US and Canada, they would report that business income only on their US tax filings, and of course, their payments to Canadian carriers would be zero-rated.
Similarly, a Canadian broker with no offices in the US can broker loads intra-US; however, if their customer was in the States, they would want a W-9 or W-8BEN-E completed.

You are right except for GST/HST

the US based broker is required to collect GST/HST for domestic shipments and submit payment to CRA.

It's zero-rated by the Carrier but the Broker needs to collect it.

I'm not sure the CRA has a way to enforce it.